By Ellis                                        S.B. No. 1103

      75R6465 JSA-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to assisting certain low-income persons to participate in

 1-3     the prepaid higher education tuition program.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Subchapter F, Chapter 54, Education Code, is

 1-6     amended by adding Section 54.6335 to read as follows:

 1-7           Sec. 54.6335.  PREPAID TUITION ASSISTANCE PAYMENTS FOR

 1-8     LOW-INCOME PARTICIPANTS.  (a)  The board shall provide assistance

 1-9     payments to an eligible purchaser of a prepaid tuition contract as

1-10     provided by this section, subject to the availability of funding.

1-11           (b)  To receive assistance payments under this section, the

1-12     purchaser must apply to the board in the manner provided by the

1-13     board.  A purchaser may apply for assistance payments before

1-14     entering into a prepaid tuition contract or at any other time

1-15     before the purchaser has made all payments required under a

1-16     contract, except that the board may require a purchaser to apply

1-17     for assistance payments before a specified date each year in order

1-18     to receive assistance payments for that year.  The board shall

1-19     require a purchaser annually to provide the board with information

1-20     the board requires to determine the purchaser's eligibility for

1-21     assistance payments under this section.

1-22           (c)  The amount of assistance paid under this section is

1-23     determined as follows:

1-24                 (1)  if the family income of the purchaser and the

 2-1     family income of the beneficiary for a calendar year are each not

 2-2     greater than the federal poverty level, the board shall pay 10

 2-3     percent of each contract payment required to be made in the next

 2-4     calendar year;

 2-5                 (2)  if the purchaser does not qualify for assistance

 2-6     payments under Subdivision (1) and the family income of the

 2-7     purchaser and the family income of the beneficiary for a calendar

 2-8     year are each less than 150 percent of the federal poverty level,

 2-9     the board shall pay eight percent of each contract payment required

2-10     to be made in the next calendar year; and

2-11                 (3)  if the purchaser does not qualify for assistance

2-12     payments under Subdivision (1) or (2) and the family income of the

2-13     purchaser and the family income of the beneficiary for a calendar

2-14     year are each less than 200 percent of the federal poverty level,

2-15     the board shall pay six percent of each contract payment required

2-16     to be made in the next calendar year.

2-17           (d)  The availability of assistance payments under this

2-18     section does not affect the amount required to be paid under a

2-19     prepaid tuition contract.  A purchaser eligible for an assistance

2-20     payment under this section remains responsible for payment of the

2-21     full amount due under the contract if funding is not available to

2-22     provide the purchaser with all or part of the assistance payments

2-23     for which the purchaser is eligible.

2-24           (e)  Assistance payments under this section are made from

2-25     appropriations, gifts and grants, and other revenue from any source

2-26     obtained or received by the board to fund this section. If

2-27     sufficient funds are not available to make assistance payments in

 3-1     the amounts provided by this section in a calendar year, the board

 3-2     shall reduce the amount of each assistance payment proportionally

 3-3     according to the amount of funds available.  If no funds are

 3-4     available to make assistance payments in a calendar year, the board

 3-5     may not make assistance payments in that year.  The board may adopt

 3-6     rules establishing the procedures for determining the amount of

 3-7     revenue available for assistance payments in a calendar year and

 3-8     for allocating available funds to persons eligible for assistance

 3-9     payments.

3-10           (f)  The board may establish a direct-support organization

3-11     under the Texas Non-Profit Corporation Act (Article 1396-1.01 et

3-12     seq., Vernon's Texas Civil Statutes) to solicit, receive, hold,

3-13     invest, and administer money, gifts, or grants to fund this

3-14     section.

3-15           (g)  For purposes of this section, "federal poverty level"

3-16     means the income level established by the United States Department

3-17     of Health and Human Services as the poverty guideline for a family

3-18     unit of the applicable size for a specific calendar year.

3-19           SECTION 2.  (a)  Except as otherwise provided by this

3-20     section, this Act takes effect January 1, 1998.

3-21           (b)  The Prepaid Higher Education Tuition Board may adopt

3-22     rules for the administration of Section 54.6335, Education Code, as

3-23     added by this Act, before January 1, 1998.

3-24           (c)  A purchaser of a prepaid tuition contract is not

3-25     eligible for prepaid tuition assistance payments under Section

3-26     54.6335, Education Code, as added by this Act, in connection with

3-27     any payments due under a prepaid tuition contract before the

 4-1     effective date of this Act.

 4-2           SECTION 3.  The importance of this legislation and the

 4-3     crowded condition of the calendars in both houses create an

 4-4     emergency and an imperative public necessity that the

 4-5     constitutional rule requiring bills to be read on three several

 4-6     days in each house be suspended, and this rule is hereby suspended.